MINUTES OF THE ASSEMBLY COMMITTEE ON TRANSPORTATION Sixty-eighth Session May 11, 1995 The Committee on Transportation was called to order at 1:15 p.m., on Thursday, May 11, 1995, Chairman Chowning presiding in Room 331 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Thomas Batten, Chairman Mrs. Vonne Chowning, Chairman Mr. Dennis L. Allard, Vice Chairman Mr. David Goldwater, Vice Chairman Mr. Bernie Anderson Mr. John C. Carpenter Mrs. Marcia de Braga Mr. Dennis Nolan Ms. Genie Ohrenschall Ms. Patricia A. Tripple GUEST LEGISLATORS PRESENT: Joan Lambert, Assembly District 29 STAFF MEMBERS PRESENT: Paul Mouritsen, Senior Research Analyst OTHERS PRESENT: Jack Jeffrey, B & E. Auto Auctions Robert Ellis, car auction dealer Bill Cavagnaro, Las Vegas Metropolitan Police Department Mitchell Spears, Las Vegas Metropolitan Police Department Warren Donaldson, NICB Stan Warren, Sierra Pacific Power Company Larry Stout, DMV Carolyn Cramer, Deputy Attorney General, NDOT George Harris, Auto Brokers Larry Stout, Assistant Chief, Registration Division DMV Jim Beasley, auto broker, Las Vegas Bob Cline, Executive Director, California Association of Auto Brokers Daryl Capurro, Executive Director, Nevada Franchised Auto Dealers Asso. Donna Wadey-Howell, Acting Chief, Registration Division DMV ASSEMBLY BILL 486 - Revises provisions governing sale of salvage vehicles. Jack Jeffrey, representing B & E Auto Auctions, stated A.B. 486 is an attempt to clean up the auto salvage industry. He described proposed changes to A.B. 486 defining a "total loss salvage vehicle" (Exhibit C). He noted if a car is rebuilt after being declared a total loss salvage vehicle it must have a brand new title so the consumer knows what he is buying. If a person attempts to circumvent the law by taking the automobile out of state, the first offense is a misdemeanor; the second offense, a gross misdemeanor. Mr. Jeffrey discussed changes in the bill (Exhibit D) noting the change from 10 days to 120 days in section 4, lines 14 through 16. He indicated the number of days was not as important as the fact they send the title to Carson City and go through the bill of sale salvage procedure before the car is resold. Robert Ellis, car auction dealer from Henderson, Nevada, explained auctions are held primarily for insurance companies (involving cars the insurance companies choose not to rebuild). A required form is used showing social security number, business license, copy of bonds, and federal ID number. This is on file for DMV and Metro and books are open at all times for inspection. Bill Cavagnaro and Mitchell Spears from the Las Vegas Metropolitan Police Department and Warren Donaldson from National Insurance Crime Bureau spoke in support of A.B. 486. Mr. Spears noted an enormous problem existed in the auto theft industry and salvage does come into play. He noted A.B. 486 will help govern places that are selling salvaged vehicles and provide an additional tool in fighting the auto theft problem. Mr. Donaldson said they track salvage in the NICB resulting in very high costs. Stan Warren, Sierra Pacific Power company, concurred with recommendations of the bill's proposers. Larry Stout, Assistant Chief of Registration Division, DMV, declared amendments of A.B. 486 have been discussed with DMV, Metro and NICB and they are in concurrence with them and do support the bill. ASSEMBLYMAN ANDERSON MOVED TO AMEND AND DO PASS A.B. 486. TO INCLUDE THE 120 DAY CHANGE. ASSEMBLYMAN BATTEN SECONDED THE MOTION. Mr. Jeffrey, during discussion, corrected a prior misstatement: If the value of the vehicle removed from the state is $250 or more, a person is guilty of a gross misdemeanor. (He had said "second offense"; however, it was the amount of money involved that resulted in a gross misdemeanor). THE MOTION CARRIED UNANIMOUSLY. SENATE BILL 296 - Revises provisions relating to invitations to bid on certain projects for highways. Carolyn Cramer, Deputy Attorney General, Nevada Department of Transportation, explained S.B. 296 would allow the Department of Transportation to use normal instead of certified mail to notify potential parties interested in bidding on informal projects. She indicated it would save Nevada taxpayers approximately $22,000 based on last year's numbers. ASSEMBLYMAN CARPENTER MOVED DO PASS ON S. B. 296. ASSEMBLYMAN ALLARD SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. ASSEMBLY BILL 447 - Makes various changes to provisions governing sale of motor vehicles. George Harris, representing the Auto Brokers, indicated they were in accord with the proposed amendments. He added the new car dealers had a problem with A.B. 447 and it was the auto brokers' desire to work with them in order to resolve conflicts and concerns. Joan Lambert, Assembly District 29, informed committee members she and Mr. Carpenter worked jointly on A.B. 447. She submitted the proposed amendment to A.B. 447 (Exhibit E) and reviewed the basic concept of the bill stating it would regulate auto brokers in the state of Nevada. The main consumer part of the bill in Section 8 requires a certain disclosure in writing to the customer before the car is bought, the entire purpose being consumer protection. Subsequently Mr. Carpenter walked the committee through the amendments. It was noted the amendments were worked out with the Department of Motor Vehicles and Public Safety. A question was asked regarding the difference between a broker and a used car dealer. Mr. Carpenter noted a broker would be acquiring new vehicles, registering and then selling them as a new vehicle....whereas a used car dealer is someone selling a vehicle that in reality has been used and licensed before. Mr. Batten noted in previous testimony the committee was informed that new vehicle dealers do not sell vehicles to the brokers. Responding, Mr. Carpenter indicated auto brokers are in fact buying these vehicles from franchised auto dealers and said the auto brokers could verify that. Mrs. Lambert clarified the brunt of the amendments are to bring them in line with other license requirements in Chapter 482 for new dealers and used car dealers and to remove the references to the Division of Consumer Affairs and the Department of Business and Industry....thereby giving one agency (the DMV) the responsibility for the regulation. Larry Stout, Assistant Chief, Registration Division DMV, responded to a question concerning action on a bond: If it is a cash bond filed with the department, a person would go directly to the department; if a surety bond, they go to the surety company. If their claim is denied, they can either get a court order to release the bond or they can apply through the director of the department to hold a hearing as to whether the bond should be released. Mrs. Chowning said it was the desire of the chair to appoint a subcommittee on A.B. 447 to be chaired by Ms. Ohrenschall with Mr. Batten and Ms. Tripple as members. Jim Beasley, auto broker from Las Vegas, speaking in support of A.B. 447, addressed the question of the privilege tax. When a new vehicle is bought, the vehicle is purchased for resale and the vehicle is sold before they actually get the vehicle. The consumer who is buying the car pays the full sales tax...so there is no sales tax revenue lost to the state. Mr. Goldwater noted under the proposed new bill the privilege tax is graduated and goes from 100% of the value of car to 85%...down 10% every year until nine years. After a vehicle has been deemed a used car, it has to be assessed 85%....15% is lost simply because it has been registered. He noted because the broker, on the dealer plates, does not pay the privilege tax...the state is automatically denied 15%. Mr. Beasley indicated they are already licensed and bonded as dealers in the state of Nevada and are simply asking for additional regulations to give more protection to consumers. He stated they would like to work with the new car dealers and they support the bill as amended. Bob Cline, California Association of Auto Brokers, indicated they stand ready to assist the subcommittee about how the California system worked. Committee discussion ensued. Daryl Capurro, Executive Director, Nevada Franchised Auto Dealers Association, spoke in opposition to A.B. 447. He stated it would be inconsistent to pass A.B. 447 in light of the fact that prior testimony by Mr. Spitler and representatives of the franchise dealers had previously been embraced. People do not want additional regulations. Mrs. Chowning closed the hearing on A.B. 447 and declared the opening of a work session. WORK SESSION ASSEMBLY BILL 333 - Revises provisions relating to privilege tax imposed on vehicles. Mr. Anderson, co-chairman of the subcommittee on A.B. 333, stated the proposal presented to the subcommittee would change in the intent of the bill as a whole. The proposed amendment is submitted as Exhibit F. He indicated the Department of Motor Vehicles asked for Section 4 to be included so the act would be in effect in October. He noted the definition of "new vehicle" only applies in Chapter 371 of NRS. Donna Wadey-Howell, Acting Chief, Registration Division DMV, said the Division does agree with the proposed legislation. There will still be some inequities unable to be solved until the new computer system is implemented, hopefully in 1997. When a question arose concerning auto brokers who opt to use the dealer special registration, she noted "under that scenario I think they would be considered a used vehicle because they are registering the vehicle....so under the definition of "new vehicle" as you have it defined right now, that has never been registered, that vehicle will then have been registered in the state underneath the auto broker and now would be a used vehicle...we will never tax it at 100%." Mr. Goldwater declared if A.B. 205 were not to pass and A.B. 447 were to pass, there would be a loophole that not only would cheat the state but also would give auto brokers the competitive advantage over franchised auto dealers. They could offer consumers a 15% discount on their registration. Mr. Allard stated it was not his intention in prior discussion for the bill not to go forward. He said he knows people are being overcharged but he was merely trying to resolve conflicts. Mr. Carpenter suggested the committee go ahead with A.B. 333 and amend A.B. 447 to take care of any loophole that may be created. Mrs. Chowning entertained a motion. ASSEMBLYMAN ANDERSON MOVED TO AMEND AND DO PASS A.B. 333. ASSEMBLYMAN DE BRAGA SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. The meeting was adjourned at 3:40 p.m. RESPECTFULLY SUBMITTED: Christine Shaw, Committee Secretary Assemblyman Thomas Batten, Chairman Assemblyman Vonne Chowning, Chairman Assembly Committee on Transportation May 11, 1995 Page